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Preliminary Results for the six months to 30 June 2017


11 September 2017

Servelec Group PLC

("Servelec" or the "Group")

Half year results for the six months to 30 June 2017

Servelec Group plc ("Servelec" or the "Group"), the UK-based technology group which provides software, hardware and services predominantly to the UK Healthcare, Local Government, Oil & Gas, Nuclear, Power and Utilities sectors, today announces its results for the six months ended 30 June 2017.


FINANCIAL HIGHLIGHTS

 

Six months to 30 June

 

 

2017 (£m)

2016 (£m)

Change (%)

Revenue

31.5

28.4

11%

Underlying operating profit*

6.5

4.5

44%

Operating profit from continuing operations

4.4

1.8

144%

Profit before tax from continuing operations

4.3

1.7

153%

Order entry**

34.7

37.4

(7)%

Order Bank***

77.4

73.2

6%

Cash flow from operating activities

6.9

1.6

334%

Net debt

6.0

13.0

(54)%

Adjusted diluted earnings per share****

7.1p

4.9p

45%

Basic earnings per share

5.0p

2.0p

150%

Dividend per share

2.00p

1.65p

21%

Notes:    *       after adding back exceptional costs, amortisation on acquired intangibles and share based payments / expense.

**    order entry is the total contract value of revenue from an order received in the period.

***  this is the total future revenue we expect from orders received

****after adding back exceptional costs, amortisation on acquired intangibles, share base payments and the related tax adjustment


SUMMARY

Servelec Group reports a return to growth in revenue and profit in the first half of the year. Cash conversion has returned to anticipated levels and the Group is aiming to be debt free by the year-end. There has been a deferment of orders in some areas of our Automation business, which will reduce the anticipated growth for the full year.

Alan Stubbs, Chief Executive Officer, Servelec Group Plc, commented:

“The Board is pleased with the progress made in the first half of 2017, particularly in Servelec HSC and Servelec Controls Oil & Gas and this progression is expected to continue into H2 and beyond. There are challenges in Servelec Controls Power & Infrastructure and in Servelec Technologies where there has been a deferment in customer demand. In Servelec Technologies, this is particularly related to SCADA / Telemetry projects and Remote Telemetry Unit (RTU) orders expected under AMP6 as budgets have been reallocated to compensate for the overhang of ‘Open Water’[1].

“The Board has carried out a thorough review of the Combined Heat & Power project in Turkey, including the previously advised debt position. We are concerned at the lack of progress that has been made by the customer in resolving their funding arrangements and the £2.6m related debt from 2015 remains unpaid. If the Board considers there is still no demonstrable improvement in progress by the customer at the year-end, the debt will be fully provided for.  

 “Servelec HSC and Servelec Controls Oil & Gas are trading well and whilst the deferment of customer spend in Servelec Technologies is disappointing, we have market leading products in Servelec Technologies and its global business is developing, The  Board remains positive about the longer term prospects for the Group.”


For further enquiries, please contact:

Servelec Group plc  
Alan Stubbs, Chief Executive Officer +44 (0) 1246 437 400
Mike Cane, Chief Financial Officer +44 (0) 1246 437 400
Pamela Weeks, Head of Corporate Communications +44 (0) 1246 437 400
Investec Bank plc  
Andrew Pinder / Sebastian Lawrence +44 (0) 207 597 4000
Patrick Robb / Matt Lewis +44 (0) 207 597 4000
Tulchan Group  
James Macey White +44 (0) 20 7353 4200
Matt Low +44 (0) 20 7353 4200


Notes to Editors

Servelec Group plc is a UK-based technology group, with significant intellectual property, providing software, hardware and services predominantly to the UK healthcare, oil & gas, nuclear, power, water, utilities, broadcast and rail sectors.

 Servelec has two operating divisions; Servelec HSC and Servelec Automation:

 -  Servelec HSC specialises in the design, development and implementation of Electronic Patient Record (EPR) and Patient Administration Systems (PAS), Social Care Case Management software and early Years education software within secondary care and social care and education in local government settings and is a market leader in the Mental Health, Community Health and Social Care sectors in England.

 -  Servelec Automation provides complex, mission-critical control systems to large blue-chip companies mainly in the UK, focusing on the oil & gas, nuclear, power, infrastructure, utilities, broadcast and rail industries. Servelec Automation also provides services from consultancy through to design, implementation, delivery, installation and on-going customer support and maintenance.

 

[1] ‘Open Water’ is the opening up of the wholesale water market for UK business’ national water procurement. Launched in April 2017, this new legislative requirement, which involves the separating out of an independent, retail business including the IT systems which our products interface with, has been a significant corporate distraction for most UK Water companies. http://www.open-water.org.uk